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hi everyone thank you so much joining green markers reports first virtual event of 2021 this is the state of banking you know we haven't talked about banking in a long time and i feel like in 2020 people were thinking oh the more act is going to get passed and so we're going to have banking and we're not going to have to worry about anything obviously that didn't happen and so banking has continued to be uh something that we have to do and talk about there's certainly been a lot of opportunities for many of the companies featured here today and i just want to thank my speakers for joining us i'm going to introduce you to them um we've got kyle sherman he is the founder and ceo of flow hub he is a legalization advocate and entrepreneur and kyle if you're not familiar with flow hub this is a company that's in software on the software side of the cannabis industry and is very first and foremost in point of sale and technology with the customer facing area then i also have todd claparis and todd is the ceo of hard car security they actually drive those big armored trucks and pick up a lot of cash but he's also the ceo of payzell he's an accomplished serial entrepreneur and he holds over two decades of business experience in both the u.s and asia pacific markets uh payzell's first financial transaction was north of 50 million dollars so he really brings a lot of expertise to us and then i have joining us as well tyler pearlane he is the chief revenue officer of hyper inc and i'm sure many of you are familiar with hyper hyper has a lot to do with the behind the scenes banking for a great many cannabis companies in the industry um all of you have been super helpful to me at green market report and i thank you always for your support so the idea of this webinar was to and i thought the first thing we should do is the very kind of main transaction that most people are familiar with is at the dispensary when you're a customer and you walk into a dispensary you often are faced with two choices one is an atm machine sitting over in the corner and you go and get some money out of your bank account and your cash or you do a plastic transaction at the counter and for a lot of customers they think oh i'm just making a debit transaction they often don't know all of the magic that's taking place behind the scenes and kyle you're very familiar with this can can you kind of walk us through what options we're we're seeing at point of sale right now yeah certainly um thanks for having me today deborah uh really happy to be with todd and tyler as well look you know when customers walk into a dispensary you know first and foremost they're probably going to see an atm in the lobby right this is the the most common form of payment in the space which is cash today many dispensaries as you know the consumer walks up to the counter many dispensers will have a a pin pad sitting there and that pin pad typically is linked up uh to what's called cashless atm and now you know cashless atm is not a typical solution you'd see in other industries right the vendors in our space in particular um you know they have you know contracts that are atypical they're they're typically three to five years long right um they lock vendors potentially high rates uh really not uh you know a solution i think dispensaries are you know usually seen and implementing a solution like this not really understanding the contracts they're getting into and what's really happening behind the scenes and so look while it will increase sales it's not necessarily the safest route to have cashless atm operating in a retail location and i think tyler and todd could probably speak to this as well um so cash cash atm these are the two most common forms of payment that you're going to see in cannabis dispensaries today there are new forms of payments uh coming out you see folks like arrow pay out of chicago that are offering uh ach transfers right obviously hyper with the hyper wallet that allows consumers to enter their routing and account numbers uh into the the hyper wallet right and they can digitally and tyler can clearly speak to to hyper there's other forms of payments that are emerging in the space although um you know i i think still most commonly we've got cash and cashless atm today cash being the king still right i've been to some of these dispensaries where they're like oh will you sign up for this special thing and you get there or something what about you guys what are your thoughts on the customer facing transaction okay i don't know i think tyler might have i think i think tyler's connection i love that i love the image he's got right now looks like he's trying to sign back on you know it's interesting um i think that's really right deborah thank you very much for having us today and kyle's 100 correct did i get you we hear you we don't your camera is still logging on but go ahead and talk thank you okay well as long as my photo's up there better of image better images of me than that than normal so that's okay kyle's right most of the majority if not all of the credit card solutions that are out there are fraudulent because they don't really have a credit card rail that's developed yet at all in the canvas industry the actual nick number the number that goes to the credit card companies doesn't exist so the debit rail or ach wire those are real and they work and they're sustainable for now until we have one of the big guys either visa mastercard step up and actually come forward with a solution but right now it's all it works right you're you're absolutely right visa and mastercard um do not want to work with cannabis companies because it's still federally illegal and a lot of people don't realize that maybe their debit card from their bank is powered by visa or mastercard and um it's interesting timing because uh we just got news that i guess it was on friday that the former ceo of ease the delivery company pled guilty to bank fraud because they were doing um these kind of fraudulent bank transactions using visa and mastercard and so they got into a lot of trouble about that um so you know i was gonna add you know the reason this happened by the way is because of what ease was doing right they were they were essentially creating shell companies to run cannabis transactions through to hide to the networks into the banks the true source of uh you know of of the purchase right and this is you know a real problem in our space because we don't have the safe banking act uh in place federally because we have such with this we have the state bifurcation uh it's it's just dispensaries are desperate for digital transactions you know it's just the matter of fact is consumers today don't single state transacted over two billion dollars last year this is this is an incredible problem right um you know consumers don't want to pay with cash yet you have you have incredible demand for the consumer products that they can go buy in these stores and so you have companies like east who are going in and trying to uh you know trying to offer what consumers want but they're doing it illegally and getting in trouble this is exactly what happened to ease this is the biggest problem our industry is facing today and it's been a problem we've been talking about for for over a decade right this is a real issue and um you know the unfortunate thing is the way that uh you know we have to solve these problems consumers are not necessarily fully um you know familiar with right and so you have to teach consumers how to use the new technology you've got to teach the dispensaries how to use the technology and then you've got the alleged illegitimate players trying to offer them solutions that maybe are more from in trouble right it was just literally breaking the law blatantly and masking those transactions just so everyone's aware of what happened there and you also have a lot of issues with um unfortunately with people that are trying to run online businesses and you have these third parties out in the caribbean or wherever trying to act as uh credit card processors for them and i've i've parked it so many of these people who've written me and asked me to write stories about it because then they get ripped off like they're owed like fifty thousand dollars or eighty thousand dollars from these companies and they just walk away from them and these are not you know companies that can just walk right off 50 grand in sales you know it's but they take advantage of them um and tyler you know you really um with hyper you guys as as kyle mentioned you have the hyper wallet but you're also very familiar with the behind the scenes activity is as to where we're working with the banks and uh we mentioned mastercard and visa that don't want to work with cannabis companies but the big banks the chase city wells fargo they don't want to work with cannabis companies either but but so what's going on with with that aspect of the banking yeah i i think can hear me okay okay sorry about that guys um so one thing real quick before i go into the banking side what happened with ease i am very concerned is about to happen with the cashless atms um they are from the brandon card network standpoint they're fraudulent they're masking a physical atm for a porn to purchase and they're using prohibited networks um and i can tell you unequivocally that shoe is about to drop and i don't think it's going to be pretty when it happens so i would caution anybody and i know the cashless atms reverse atms are pervasive i know people say that they're permissible and they're okay they're not um not even close and so my fear is what just happened with ease is about to happen to that entire model for the industry it's going to hurt a lot of people but but to get to the banking side um i think what people fail to realize and we talk about this extensively this is not necessarily just a cannabis problem this is a highly regulated industry problem and if you look at all of the other industries that are cash intensive or highly regulated that are perfectly legal they have the same banking issues i mean i get as many calls from those folks as i do from the cannabis industry looking for help to find somebody that will bank them so any industry that poses a significant regulatory compliance burden to a bank or credit union that adds risk that puts their charter at risk and they don't want to deal with it so the notion that even if the safe act passes or even upon federal legalization i don't see the big banks like chase and wells fargo ever coming into the space because they don't bank those other industries either and so i think it's important for people to understand that this is going to be this way for the foreseeable future also regulators are not going to change their expectations of the banks and credit unions trying to bank this industry so the notion that all of a sudden something's going to pass or federal legalization occurs and you know chase comes running to the door i don't see that happening um unfortunately for the industry yeah you know tyler it's a great point and the a real world example of this happens in sports betting right you look at draftkings and other firms like draftkings federally it's legal yeah for for sports betting to take place it's bifurcated by states some states allow it others don't right and and what happens is you know you see these big banks they're not serving any of these firms today no at all for sport even though it's federally legal and recognized even though it's legal in the state right and this is exactly your point tyler that i think you're making is that you have all these other industries that are highly regulated that just banks are not going to touch and i actually i've argued for quite some time now i actually believe that many banks won't touch this space for decades to come like it's just it you know it's just not going to happen it comes out of compliance and cash and what we found is this this industry will always be cash intensive and from a bank or credit union standpoint when you're dealing with a cash intensive industry from a regulator standpoint if you can't prove beyond a shadow of a doubt where that cash is coming from and then it came from a legal sale there's as much likelihood as it came from a nefarious activity as it did from a legal sale and so that's a very touchy thing for any banker credit union to deal with i mean to your point kyle i read an article about two weeks ago about the issues that canadian cannabis companies are still having with banking there and again perfect example of what's what's uh you know in the foreseeable future it's very accurate i mean if you talk to go talk to the canadians now tyler will tell you this right if you go talk to the canadians now they're still having issues getting loans mortgages refinances on buildings i know two very large companies up there that'll still say it's not exactly easy and that's a legal market and so tyler's point for a compliance and regulatory perspective 100 percent most of the banks that get in our industry now that are there's not everyone says there's hundreds of banks that's not accurate either there's a handful of banks my guess is and tyler and maybe kyle kind of come chime in with this but i bet there's only between 50 and 100 banks really that are doing cannabis knowingly there's probably hundreds that are doing it without knowing because they have accounts that are signed up as mrs firs you know green shop and they don't look at it until they find it and then they whack it like whack-a-mole but the reality is the banks themselves have to have a compliance uh protocol that enables them to feel comfortable because if their board pulls the plug the bank goes away and that's happened already in our industry a couple different times where someone like first green bank which was sold in florida had the first bank in florida but it was actually sold because the the bank the board of directors said no we don't want to do cannabis anymore so that can happen well you brought something really other companies though that are that are you know obviously trading they're obviously banking you know well well here's here's one of the biggest ironies in all of this and i went through this in a different path but you have the training you have nasdaq and nyse which will not allow cannabis companies obviously to be there but there are publicly traded banks on nasdaq and openly bank this industry has stated it in a large portion of their revenues comes from banking the cannabis industry so it's kind of like you know to go back to the conundrum of of you know what's right and what's wrong in this space it's kind of a perfect example but todd brought up one thing and i want to touch on um in regards to payments and payment processing and i'll talk about specifically the east thing i had somebody say to me it was the ceo of a company he said well he said when federal legalization happens you know um all of these things will go away so instead of somebody pleading guilty they just try and drag it out and my comment to him was no no this is bank fraud this is not this has nothing to do with cannabis this is bank fraud and that's the difference and so again um i'm just really really concerned about what's in the marketplace right now i don't see it and very well right and and it's interesting because as you were just saying about the banks that are listed on the nasdaq that are dealing with cannabis and yet nasdaq is saying no no to cannabis you know i know todd and i've had this conversation probably a couple years ago todd when you guys first started uh dropping money off at a federal reserve bank and you were like you know it's now in the system so this this money that went into this federal reserve bank from a cannabis it's now circulating so saying you don't want to be in it it's kind of too late that you needs out of the bottle right right yeah i think in total right now we've done over 2 billion in cash to the federal reserve but you're right deborah 100 000 the bank that started this like technicolor was for the first bank in california to technically start the cannabis industry there was more banks that came on after that when north bay credit union chris calls one a great job um south bay down in the south you know there's there's banks that are coming online i think the biggest one in california right now is around a 50 billion dollar company but maybe tyler or kyle can share what they know but i don't know many others you don't you don't have like a 200 billion dollar bank in the cannabis industry the majority of them are smaller regional players that have taken a stab and will make a stand now because they believe they're going to be able to sustain the customers later that's one thing i would tell the people that are listening here if you can go to your local banks and you make a push i bet you any one of the three of us maybe even deborah would get right in front of it with you and talk to that bank to bring that bank forward i've literally brought forward over 18 banks myself to come and bank in the canvas industry and it's it's talking board level it's talking to the president and it's not just talking to the branch manager saying hey would you guys get into canvas but the more banks we have the better it off is for everybody because then you can make all the banks compete for our business which is exactly where we want to be that's right i think ultimately what we're going to see in the future is a network of state chartered banks credit unions that have their own developed uh you know compliance programs for mrbs marijuana related businesses right and this is what ultimately it you know look i i think cannabis dispensaries and mrbs in general are going to be able to bank at scale it's just going to be a network of local banks truly is is where you're going to see you know probably 80 percent of that uh volume flowing into right and maybe you have some bigger players you know covering the other 20 uh for maybe some of the larger publicly traded companies over time or whatever you're not going to see chase bank you're not going to see wells fargo frankly um but you are probably going to see uh some bigger banks right that rather than just a state charter bank or credit union but i think they'll be the majority right over time um but you know the interesting thing about all this right is there's a future here that's developing i mean you see it in the news every day with bitcoin and cryptocurrencies you see decentralized assets you know it's going to be interesting to see over the next decade how banking is transformed with these new technologies um not to necessarily circumvent regulation but to make things more transparent clearer and uh and who knows what the federal government's going to do with cryptocurrency ultimately how they're going to regulate it but i just i just noted that it's going to be something to watch because i do think the banking industry in general will be disrupted over time by blockchain technologies and otherwise just because of the pure transparency that you get out of blockchain so it's just interesting right i think we're going to see some some fascinating growth uh in banking in general so are the cannabis companies continuing to have multiple bank accounts and as as a way to combat the account closure because i know that that's what it used to be is you would see or i would have people tell me i've got five different bank accounts open so just in case one gets closed i just jump over to the other one so that i can continue working you know that actually happens but if you're working with a bank transparently that's running a clean compliance process and the reporting properly that bank account's not going to get shut down if you're an honest business you're running your compliance inside of your dispensary locally well right you're you're doing the right things you're reporting to the state system like a metric right a bio track or a leaf data system you're you're doing things above board you're documenting processes and sops the bank's doing the same that relationship's going to be a strong one and tyler and todd could probably pick it up but it's you know i i i do see a lot of these relationships are becoming quite strong if you're working with the right institutions now if you're hiding right and you're like you're kind of you know not being honest and upfront you probably need five bank accounts right they're going to figure out what you're doing eventually to kyle's point it's so funny i will always try and refer people to the institution's old bank them in each state uh we've tried to do that you know extensively over the years and i'll have operators call me all the time and say well i don't want to work with them because they're asking for way too much and i said no that's what you want if they're not asking for those things they're not going to be banking you long and you're going to be playing the shell game for the foreseeable future so be thankful that they're asking for that because before he's right they're being transparent and even if you think that something's not really in the realm of possibility or what they should be asking for you've got to understand the only conversation that matters in this equation is the conversation between the regulatory body and the financial institution so if somebody's asking you for something it's coming from the regulator not even necessarily the institution so todd you mentioned that that's really it's a small universe of banks that are working with the cannabis companies are they charging a whole lot of money and i mean obviously i know they have stars and they have uh the different reporting and compliance costs but i've also heard they just charge a fortune for these accounts because they can because the customers don't have many options i i have to say you know i i don't know if it's because they can that's changing rather that that will change yeah yeah and look it's not because they can it's because they have to it's a there's a high cost to running the compliance program for these banks this is not free i mean they're they're taking a lot of risk on and they're they're doing a lot of work behind the scenes to make sure that the money that's flowing into their institution is clean money that they're they're so i mean that takes a lot of work right it's extraordinarily expensive and so i i think you know this is something that operators need to understand you know tyler's absolutely right they've got to slow down to speed up right like they've got to take the time on board properly be transparent about their shareholders and their business right sign up and you'll you'll run a long time with that institution you'll have a great relationship um as todd mentioned the the cost of compliance is coming down as more and more software can automate the process you know as as flow hub connects our data in directly with an institution right they can ingest and see that you know every penny that's being spent and where it's going and if you add some automation there right with what hyper is doing for example right i and maybe todd can speak to as well it reduces the cost of compliance right but the cost of compliance will always be higher than just a standard bank account where you can kyc an individual you just can't expect a 20 checking account for uh you know for a cannabis company it's it's not going to happen that's true and and todd now we've talked so much about uh what's going on you know with all the technology but a lot of companies are still dealing with mountains of cat you know what is going on right now with the cash situation is it still are we still dealing with with companies with mountains for cash and is there still you know the risk of transporting all that on a daily basis yeah our insurance costs went from 125 000 one year to three hundred and seventy five thousand dollars a year yeah it's crazy that the amount of cash that's still available and still floating around in our industry is just nuts and that in itself is part of the dilemma but that'll be for the next couple years because as kyle had said more and more banks are coming the cost of compliance is still there tyler and firms like tyler firm have a compliance tool in the back end to help those companies which is great the banks themselves realize that in the future that it will become more cash less because if you look around the globe china was cashless 15 to 20 years ago and i know people say that's not possible but if you go to shenzhen or you go to hong kong or guangzhou or even shanghai beijing any major city chongqing has 75 million people they don't even use cash anymore they use their phone so the united states is way behind because everyone's still stuck on this tactile function that they have to have a dollar in their hand the reality is it's gonna it's gonna come the day when we don't have coins first of all they're trying to move us towards no coins now anyways and then eventually it'll go towards where we have no dollars so eventually i'm hoping i'd rather have no guys on streets with guns walking around canvas cash it'd be better you know better system would be digital right but as you said we are still dealing with lots and lots of cash an incredible amount of cash deborah i'll tell you you know at flow hub we we process over three and a half billion dollars of cash annually through a point of sale right and you think about that it's an incredible amount of of cash flow right flowing through the system uh that you know armored vehicles have to go pick up this process of having to go to the bank and prove that every dollar it was a legal dollar right i mean this is this is mind-blowing we're just flow hub's just a small part of the overall industry right this is just our little slice uh you know tyler has a ton of cash flows and todd has a ton of cash flow like this it's like you look at this you you zoom out and you go oh my gosh there's probably nearly 20 billion dollars of cash in 2020 flowing through you know it's it's absurd and uh you know yeah yeah i've been in the vaults of uh many financial institutions and i gotta tell you i mean it's if they're if that money is in there it's pungent and so for companies like pods you know it's it's vital that they take that burden off those institutions um so that cash doesn't come in because it poses risk to the institution one two you know it creates other issues as well one other thing i want to touch on from a compliance standpoint for banks and credit card was talking about it um people people fail to realize the officers of institutions that make the determination to bank this industry have personal liability so if i work for a bank or credit union that decides to bank this industry and i do something wrong or something falls apart with the program i can have a civil money penalty imposed on me they can't be covered by the insurance policy of the institution so um you know i try and communicate that to operators throughout the country just so they know that they have risk too this you know they're not off the hook for this so they're the the dno insurance that the bank doesn't cover that wow that's something and and todd are we still seeing a lot of crime associated with all these uh armored cars well across the industry yeah they've been multiple reports even in 2021 where there's been crime associated to transportation cash gosh that's that's scary even in our network deborah we see people get robbed uh we hear about it at least we don't see bill but we hear about them getting robbed fairly frequently i would say more frequently than you you'd think right um and and it's purely because this is an all-cash business i mean you think about uh going completely digital what is there to rob some inventory in a la a locked vault it becomes a lot less uh you know a lot less interesting to do a criminal um there's there's not a giant cash drawer sitting there i mean some of these dispensaries will do a hundred million dollars a year in revenue right uh in mainly cash right so you think about the amount in a busy dispensary in a city uh the amount of products or so there's extreme demand for these products right consumers want cannabis i mean it's a two trillion dollar black market industry right like this is this is no joke and so when you have a dispenser we're doing 100 million dollars a year a single location in a busy city doing 100 million dollars a year in cash i mean are you kidding me that what a target for a you know a criminal or a group of criminals to go and try to attack that that particular retail location just to steal the cash registers knowing how much cash is in them i mean it's just it's a it's absurd i think one of the challenges is god i think i know what you're talking about but much of the business for these places is tourist related so people come in they're not a repeat customer necessarily they don't want any record that they were there and they just they want to pay cash and they want to get out and so that's one of the things i think the industry is going to have to figure out how to overcome in the years to come but i i do feel strongly that upon federal legalization the brand of car networks will come into the space obviously help substantially and that's a great segue because i wanted to kind of i mean we've kind of like laid the ground on where we're at now a little touched on a little bit of where we've been but looking ahead um you know is there legislation that we think is going to it sounds like from you guys it might help a little but it's not going to really change on the level of the big banks or the the credit card companies even if we do get legislation what are you hearing as far as what we could expect this year or even in so so i'll just talk to the to the credit card side of it they are not coming in until federal legality period uh and so you know i've heard i i uh mj biz did a survey to operators about why they wanted the safe act having operators send notes out to their consumer base saying hey call up your senator get the safe back pass we can offer credit cards and every single one of the people polled said we want the safe act to pass so we can offer credit cards it's not the case it doesn't change the federal legal status of the product and therefore they will not participate so um that's that's one thing that i think the industry needs to understand um today right right um yeah you know and that opens up the bigger debate of you know descheduling and then that whole that that the whole pandora's box of of that debate um but are are you expecting any changes uh this year with regards to banking even if at a lower level i mean i i i know uh todd and kyle can attest this too but as new markets open new institutions enter to bank it and that helps everybody right because regulators get more comfortable even more comfortable examining these institutions field examiners get more comfortable with it the stigma starts to enter the market take that first step and i think the biggest catalyst for that is actually not going to be legislation it's the fact that there has not been an institution shut down to date for banking the cannabis industry we now have a seven year snapshot um and so i i think that's you know that's very compelling well and if we start uh sales this summer in new jersey which could be a big uh tipping point for the northeast and of course we know new york wants to to jump in on that but new york is definitely nowhere as close as new jersey but with uh governor murphy signing the legislation i mean he was saying that they think that the sales could begin this summer and with new jersey being so close to new york and the banking center of the of the country um it definitely could maybe start to tip those scales totally rude and i don't see new york allowing those recreational tax revenues to cross that bridge too long so i completely agree with you tyler no well there's certainly because anytime i've uh done a story at a massachusetts dispensary um every dispensary that i've i've done a story with over there has said roughly 50 of their customers are coming from new york and that that's granted that's like the berkshires so that's that's near where not near where i live but a couple hours away from where i live um so it's it's the berkshires is certainly not a heavily populated area you know it's a mountainous recreational area t's not like boston i don't know anybody in new york that's driving the boston to go to a dispensary but i do know people that are driving to the berkshires um but it certainly would be a whole lot faster to go to new jersey and go to massachusetts yes and i'm sure governor cuomo is certainly not going to be thrilled with uh losing out on all that tax revenue now in both of those markets deborah already have multiple banking options so the the operators there are banks there are more coming soon and so that won't be an issue for the state excellent um and then you know as far as um the opportunities i mean kind of you know by not having cannabis totally federally legal does allow opportunities for companies like all of you to thrive and continue to build your base right yeah i think there's two parts to that right absolutely right it does give us an opportunity and an edge i think and that we're we're you know we've started companies uh pretty early on in the space you know i i can speak for flow hub right six and a half years ago i founded the company right so we we've been in business for a while i do think though that even post federal legalization we're still as we've talked about we're going to see banking issues we're going to see these other issues you know we're not really solving temporary problems today right these problems are going to exist for decades to come uh and and so i think um you know look uh our technologies are more relevant than ever right now but they're gonna continue to be very relevant uh for for quite some time you know even post legalization we're gonna be solving you know fundamental issues uh in this highly regulated space so i think to kyle's point too i think what we've learned in this space gives us the opportunity to transition into others and just speaking from the hyper standpoint i mean we you know we have on a road map to go after multiple other industries here shortly um and we had to cut our teeth here but um it's all it's all good i mean it's it's all for good reason we've learned a lot and we expect that to really help propel us into other markets soon i definitely want to open up two questions if any of our audience wants to ask a question there is a little button to to type in if you have a question and our co-host alicia will help us field those questions um so definitely uh chime in if you have anything ty why don't you tell us a little bit oh i mean we've talked about hard car questions oh i love this wait wait wait we have a bank celebrity and on the chat line if you see danny spallouzio you'll see the evp of south jersey federal credit union join your show because i sent him a note about this show danny's fantastic he's a good example of a great banker in new jersey yes who's willing and able to help companies even but i have one company that is actually talking to him because of a home loan so i just saw that emma i say thanks danny for for showing up we really appreciate you i mean it's banks like that it's banks that are going to be able to get out in front of it realize there's an opportunity for them and help right that's what i really want to stress because kyle knows it tyler knows it anybody in the industry knows that if you've got a really good cooperative banker that can move things for you you can move mountains in this industry so i like um getting the banks to actually compete i think it's the smartest way forward because if we don't do it somebody's going to do it and i know from my perspective the banks want to compete because they want to be relevant in the next five to 10 years they don't want to get run over by chase or by by another big wells fargo for instance when those guys eventually come in i think the banks that have been doing this for the last few years we'll have a nice basic customers that really trust them that will do a good job with them and we'll move the whole industry forward so thanks danny for showing up jersey's in the house what's up daddy so tell us a little bit about how jersey's in the house um i got frustrated because guys like kyle were out there beating down doors trying to get point of sale systems to everybody and guys like kiva were coming at us for loans for different things and guys like harborside needed a lot of different things the banks themselves were overcharging fees so i went to the banks that i really really liked and i said would you guys compete against each other to try and grab cannabis business and then the back side of that i went to the insurance companies and i started doing that as well my biggest account was scott's miracle grow that we solved the 20-year problem for them in banking in two months so when we did that they were really impressed because the hydroponic stores by the way tyler want to talk about this too the hydroponic stores really do not have any way into banking so they've been challenged with getting into banking for close to 20 years because they have a lot of cash when somebody that's one of kyle's you know download pipe growers goes out and buys fertilizer they buy in cash when they go to those stores so they've had a problem for a very long time we were able to solve that for them and then a few other good clients bigger clients we can't really name right now but we will be soon that we've been helping them get their situation straight i just wanted the banks to compete that's all gotcha gotcha do we have any questions out there oh we have one let's see um any feedback regarding bridgehampton bank long island new york no feedback but i can't say i didn't even if i had it just because you know we all have to be respectful of what institutions are doing and i never want you know things to come across in any way other than positive so i no feedback but again if anybody needs a introduction to an institution in a specific state call email happy to help um don't ever pay somebody for that introduction ever um because you know we will never charge for something like that and we're happy to help don't ever pay somebody no still happening today yeah i heard of some joker out of new york won't name any yeah absolutely there's a guy in new york that was charging three thousand dollars to get introduced to a bank i would love to put him out of business so we have a question from carrie goffy and she's asking how do we find out who the cannabis friendly banks are in our area uh i should be pretty easy to reach give me an email direct introduction yeah happy to i do it all week every week so all right uh reach out to tyler then uh we have a question from brenda biles in my perspective the numbers in cannabis speak for themselves regarding business development efforts however the concerns are obvious could you all speak to the qualitative factors required in calming those concerns with bankers and others i mean that was kind of what you guys were talking about about you know the the tipping point and removing stigma as more and more people get involved but i guess a lot of hand holding i mean yeah i think i i don't know if i'm answering this correctly because it was kind of a loaded question but i think institutions i don't think i know the ones that are banking this have worked very closely with the regulatory bodies to to to make a finite framework for how this needs to take shape and so they have very specific criteria uh in their you know when you sit down with an institution that's banking this they're going to tell you how things move around i mean they're not doing that to be difficult they're not doing that to be jerks they're telling you that because they don't want one bad actor to jeopardize the entire portfolio and or their institution and or themselves personally so um i think that that criteria has gotten much more uniform even in the last 18 months and again that that comes from regulator experience that comes from financial institution experience and i think one of the things that's really happening throughout the country may not be the best thing for the industry but as the msos completely grow and consolidation continues to occur and these guys are publicly traded that just adds additional transparency across the grid and it makes life easier for institutions we got a question could you discuss merchant acquirers in the cannabis industry are they legally operating rails for debit transactions examples payback transact first okay so debit's very different than cashless or reverse atm um i will tell you that again the cashless atm model if you're walking into a store and you're inputting a debit card and they're rounding the transaction you're putting your pin number in and they're giving you cash back that's a cashless or reverse atm i'm not going to mention names of companies that is fraudulent those are using prohibited networks and my fear is that what just happened with these is about to happen in many of those companies right and some of the banking experts i've talked to with specifically with that whole ease situation was um and they had said even though you may stop those payments like he said we quit doing those types of payments back in 2019. um from my understanding the the people pursuing the bank fraud they don't necessarily have to say hey yeah that's great you stopped in 2019. they're still looking at those transactions that happen that are on the books so whether you stopped or not they kind of don't care it's that they happened in the first place that's my understanding correct absolutely correct it's bankruptcy would still go back and and and do something about that um and then we'll we'll take um one more question then i think we'll move to the lounge i don't want to uh take too much of my speakers time who volunteered so so thankfully today um let's see um north bay credit union foreign alliance such that ccia members can bank with north bay do you see similar alliances in other states will this be a widespread solution with less reliance on other financial institutions good for you well yeah yeah so um north bay and other credit unions have been linking together there's some that are actually doing a like a loan network so they can actually aggregate loans between the cannabis and the credit unions you'll find larger banks won't want to do that the credit unions are going to work together because they believe that they have a a quicker response to market they can get to people faster they believe they have a personal touch and i do believe that most credit unions can do that faster because if you call bank of america right now just call them right now anybody want to challenge man as you can you'll wait 30 to 40 minutes to talk to somebody you call a credit union you probably get somebody the first call or maybe the second call so the the level of touch that goes for a credit union can be a lot closer to a person so i think that would probably be something where there's a strategic advantage for the credit unions and they're on here actually there's a couple of people that i probably would mention here that have been in credit unions as well you know school i like to talk to somebody and i like to get things resolved in person or i'd like to get things resolved quickly not with some automated system that's going to take five years to go through uh i just see that and we have a question but merchant acquires operating and other high-risk industries these merchant acquires labeling solutions to other payment providers in the space currently i think you kind of touched on that tyler yeah the branded car networks are opposed and the the entire reverse atm or cashless atm model is fraudulent by nature so you're they're coding a transaction as a physical atm but this is being used at the point of purchase for a federally illegal product um and again the networks that they're traveling on are prohibited so all right um yeah this is so let's take this last question and then we'll um move to the tables um discussing international banking how are colombia and mexico going to enter the market how is uruguay banking with germany right now i don't know anything about international banking i don't know i i'll just mention this the interesting thing about the international industry is you have you have federal legalization occurring in these countries and so because of that uh you know the industry's looked at a bit differently than it is in the u.s now it doesn't mean that banking's easier tyler mentioned this earlier with canada today right we have a federally legal industry in the country of canada but uh it's still difficult to get lending and otherwise but i you know i think you have to just understand that federal legalization does bring more uh certainty uh to the equation right and so the card networks as tyler mentioned earlier they're going to come on board when we see full federal legalization of this product of the united states right uh the fact that mexico is doing this uruguay is doing this they're you know they can openly work more cleanly with with uh you know existing financial products we just can't do that in the united states and in the us we tend to be very hesitant to work in general even with federal uh legalization in highly regulated markets as we've kind of discussed earlier on i think one of the interesting things too deborah we've dealt with this in puerto rico extensively some of these markets they use correspondent banks for international transfers which poses a whole nother issue right and so um if those correspondents are opposed to the industry which inevitably they are that creates a lot of dynamics so it's been really fascinating to watch that i want to give todd gave somebody a shout out i want to give [Music] one of the first uh bank ceos i've ever met uh lonnie talbert with southwest capital new mexico is on ilani thanks for joining buddy a lot of respect for him and and i love working with him so thank you just help us out here if um can we go to the lounge absolutely so we're gonna just take a break here um and then we can go back to the event page and join in some to the lounge and meet other people in a round table table type of discussion so we'll take a break here and and we'll see you um over in that and i just want to thank everybody um we're going we're going to go on and end the the main event here i want to thank todd and kyle and tyler so much uh this was our first virtual event and it was uh definitely a learning curve um but i'm hoping that it's not the last i'm hoping we'll do uh many more uh you did great denver thank you thank you thank you guys um this was my first time on air meet and i actually do like this platform it just took me a little bit of uh learning uh to figure it out but i actually do kind of like it uh so hopefully we'll use this uh some more and again you know i want to thank all our audience i want to thank you guys for supporting green market report we're on our fourth year and and we're hanging in there so thank you everyone and we'll see you in the lounge thanks kyle lonnie todd good to see you guys good to see you tyler good to see you todd take care of deborah good to see you as well thank you so i should alicia do i hit take a break okay in the session